Twitter shares soar 35 per cent on back of user growth
Revenue more than doubles to $312.2m and user growth jumps 24% at microblogging firm
An @twitter banner is displayed on the exterior of the New York Stock Exchange. The microblogging company said revenue more than doubled to $312.2 million in the second quarter. Photo: Bloomberg
Twitter chief executive officer Dick Costolo is getting the company back on track with Wall Street by drawing people to use the service more, sending shares soaring more than 35 percent.
The microblogging company yesterday reported revenue more than doubled to $312.2 million and user growth jumped 24 per cent to 271 million members in the second quarter, topping analysts’ estimates.
While Twitter’s net loss widened to $144.6 million, the company forecast sales for the current quarter that exceeded estimates and raised its full-year guidance.
Mr Costolo bolstered the numbers by making a case on the earnings call for Twitter’s opportunities.
He said including the audience for tweets beyond its own platform, the company’s reach is more than twice its active user base.
Twitter’s World Cup features show what it can do for future events, he added. Costolo said revenue rose mostly because users spent more time on the service, as the product was tweaked to better attract them.
The results and comments are part of Mr Costolo’s comeback attempt for the San Francisco-based company.
After two straight quarters of decelerating user growth, which followed Twitter’s initial public offering in November, investors had questioned whether the company’s fastest sales growth was in the past.
The CEO responded by gutting Twitter’s executive ranks, including replacing the chief financial officer and operating chief.
“Our main message today was that we’re looking to build, and we know we can build, the largest audience in the world,” Mr Costolo said in an interview yesterday. “We can deliver on that promise.”
Shares jumped as high as $52.48 in extended trading, after rising 1.8 per cent to $38.60 at yesterday’s close in New York.
The stock, which reached a record $73.31 on December 26, had plunged 47 per cent since then on concerns that Twitter wasn’t growing quickly enough to justify its valuation.
The company is among the most expensive in technology based on projected 2014 sales.